Memorandum by England's Regional Development
Agencies
1. RDAs were established in 1999 to foster
the sustainable economic development of their respective regions.
The RDAs welcome the opportunity to comment on the future of the
CAP.
2. This paper sets out the RDAs views on most
of the issues identified in the Call for Evidence. The paper adopts
the same structure as the questions in the Call for Evidence.
Question 1 What should be the long term
objectives of the CAP? Does the title "Common Agricultural
Policy" aptly fit your perceived objectives of the policy?
What do you consider to be the main pressures on the CAP as it
currently is?
3. The CAP's long term objective should
be to create, foster and maintain a land based industry which
produces safe, high quality, wholesome products in a sustainable
way. These products should be marketed effectively and the businesses
which produce them should do so in a way which allows them both
to be profitable and to preserve the environment. These objectives
can perfectly reasonably be described as a Common Agricultural
Policy.
4. The main pressures on the CAP include
how to try to achieve the objectives set out above given the differences
outside and within the EU. International trade obligations, budgetary
pressures and the ineffectiveness of some existing support mechanisms
all provide further pressure. In addition there is significant
and growing environmental pressure on the CAP. The role of agriculture
in contributing to climate change cannot be divorced from the
various support mechanisms used in the CAP.
Question 2 What has been your experience so far
with the reformed CAP? What has worked well and less well? And
where can lessons be learned?
5. The major changes made to the CAP in
2003, were designed to break the link between subsidy and production.
Thus far our assessment is that the impact has been rather limited.
There are two primary reasons for this. The first is that the
changes are to take place over a prolonged period of time and
it is still relatively early in that time period. Secondly, farming
is a long term business and rapid change is not possible in some
sectors. The complexity of the reforms and the well-rehearsed
problems over the administration of the Single Farm Payment means
that the full effects of changes in the support system have yet
to be witnessed.
Question 4 What short and longer-term changes
are required to the CAP's market mechanisms? Suggestions made
by the Commission have included re-examination of certain quotas,
intervention, set-aside, export refunds and private storage payments
6. Given that many market mechanisms such
as export refunds, private storage aids etc bring relatively little
benefit to the farmer directly there is a case for gradually seeking
to phase them out. This would also be in line with a move towards
a much more market orientated philosophy. The continued use of
set-aside as a policy instrument needs to be reviewed—especially
if the use of land to provide resources for non-food products
including energy is to be encouraged.
Question 5 What is your view on the introduction
of the European Agricultural Fund for Rural Development (EAFRD)?
Do you consider that it is meeting its objectives thus far? Is
it suitably strategic in nature, meeting the needs of rural society
as a whole rather than being restricted to aiding the agricultural
industry? How well is it being co-ordinated with other EU and
national policies on regional and rural development?
7. The RDAs consider it vital that The European
Agricultural Fund for Rural Development (EAFRD) is seen as part
of the wider picture on Rural Development in England's Regions.
We consider that the policy background and overall priorities
will allow the Fund to achieve a more strategic focus than the
previous programme, and delivery partners in England have maximized
this in their plans and priorities, but we have concerns that
the detailed operational regulatory framework may dilute the potential
to carry this focus through as practically and overtly as we would
like. Further details on this are given in the subsequent paragraphs.
8. The England Rural Development Programme
which ran from 2000-2006 enjoyed some measure of success. So too
did the Leader + programme which ran alongside it. However the
ERDP 2000-06 was not particularly strategically driven nor was
it especially well integrated with other strategies and initiatives.
There was some improvement towards the latter part of the programme
when the Rural Development Service engaged with the Rural parts
of Regional Development Agencies and RDAs became members of the
Regional Appraisal Panels which determined grant applications.
These panels considered applications under three of the 10 schemes
operated under ERDP 2000-06. Those schemes were the Rural Enterprise
Scheme, the Vocational Training Scheme and the Processing and
Marketing Grant Scheme.
9. Much of the funding granted under these
schemes was directed to the farming sector rather than the wider
rural economy, although there were some relevant measures. Although
the programme was administered by the Rural Development Service
there was little evidence of creative links between the three
schemes mentioned in paragraph 7 and the remaining more environmentally
focused schemes
10. Whilst it is true to say that there
were improved links between the RDS and other delivery bodies
in the latter stages of the programme that was primarily at operational
level with a view to avoiding or reducing duplication rather than
at a strategic level.
11. The Rural Development Programme for
England (RPDE) will cover the period from 2007-13, and is established
under the EAFRD. The Objectives set at EU level for the programme
should give it a much stronger position from a strategic point
of view for appropriate delivery by Member states.
12. From an RDA perspective Axes 1, 3 and
4 of the new programme become key responsibilities. Axis 1 broadly
deals with farming and forestry businesses. Axis 3 addresses the
wider rural economy although some measures specifically relate
to farm diversification so the primary beneficiaries will be industry
related businesses. Axis 4 requires that at least 5% of the total
EU budget is spent using the Leader methodology and RDAs have
undertaken the responsibility of ensuring that this obligation
is met. The EAFRD Regulation sets out the minimum spending to
be undertaken against each Axis and DEFRA in discussion with RDAs
has allocated amounts to each region to take account of the issues
facing each region (for axis 1, 3 and 4). These amounts have subsequently
been increased as a result of the use of voluntary modulation.
Axis 2,which addresses environmental issues, is the responsibility
of Natural England and the Forestry Commission.
13. Following the publication of the Rural
Strategy 2004, the regions developed Regional Rural Delivery Frameworks
(RRDFs) which provided the opportunity to draw together existing
strategies (such as the Regional Economic Strategy, Sustainable
Farming and Food Strategy) into a more coherent pattern with clear
evidence based targeting of priorities and resources. They brought
together partners operating in the economic, social and environmental
sectors. The frameworks also provided the opportunity to identify
links with other elements of support such as Business Link, Sector
Skills Councils and the LSC. This is particularly important for
the farming industry which needs to adapt to being treated much
the same any other industry rather than continuing to have special
solutions devised for it. The RRDFs therefore set a more coherent
strategic framework for intervention in rural areas linked to
a wide range of broad priorities and they have therefore provided
a relevant base on which to take forward more detailed planning
for investment programmes to ensure improved alignment with mainstream
investment.
14. For the Rural Development Programme
2007-13 the RDAs, together with regional partners, have developed
detailed Regional Implementation Plans (RIPs) which outline the
key priorities and focus for the programme within the region.
The key elements of the plans which underpin an improved strategic
and integrated operational focus include the following:
— The development of a single regional
plan ensures that the key delivery agencies for the programme
(Natural England, RDAs and Forestry Commission), are working to
ensure a shared focus and improved integration across the axes.
— The plans are developed with regard
to the strategic priorities outlined in the Regional Economic
Strategies, Regional Spatial Strategies and with reference to
the priorities identified in the RRDFs which pulled all main regional
strategies together to extract their application in rural areas.
— The plans feed into the national
programme plan to ensure that the different priorities which exist
in different regions are appropriately reflected in the national
plan. This is extremely important in recognition of the diversity
which applies in the regions, and in underpinning regionally and
locally appropriate delivery solutions to ensure greater impact
and outcomes for the programme on the ground.
15. The National Programme Plan has been
submitted to the EU for approval but we await a decision on this.
The RDAs' view is that, at objective level, the RDPE 2007-13 has
the ability to take a much stronger strategic focus than its predecessor,
and we have worked hard, as outlined above, to ensure that we
maximize that. We remain, however, extremely concerned, that the
operational details pertaining to the programme will inhibit the
practical delivery of a more strategic approach in some form.
Whilst the EU policy has drawn together a number of previously
separate funds to improve the ability to set more strategic priorities,
the EU finance and audit side, through the Common Monitoring and
Evaluation frameworks, for example, and the budgetary frameworks,
appear to be based on the previously separate programmes, rather
than following the integrated emphasis of the policy documents.
The requirements for the Leader element also appear to reflect
a separate programme in the main, rather than emphasizing that
it is, this time, purely a delivery mechanism for the wider programme
as a whole. Whilst we may be able to work with these issues to
still deliver projects which are integrated and provide considerable
added value, the importance of this may not be reflected in the
programme evaluation since projects will be required to be funded
only from one axis and through one main measure.
Question 6 Is there a case for a higher level
of EU financing of rural development? Do you have a view on the
extension of compulsory modulation from Pillar I (Direct Payments)
to Pillar II (Rural Development)?
16. The switching of funds from Pillar I
to Pillar II is inevitably contentious. Those who advocate it
are sometimes unfairly perceived as not being sufficiently supportive
of the farming industry. For the avoidance of doubt therefore
it is worth stating that the RDAs have been and remain committed
to a farming industry which is competitive, market driven, environmentally
responsible, operating to high standards and forming a key part
in the fabric of rural communities.
16. It is our view that there should be
a progressive switch of funds from Pillar I to Pillar II. Support
for rural development will, necessarily, include support for the
farming sector but by placing farming in the context of the rural
economy it will be better placed to receive support from mainstream
funding. A prime example is Business Link. Farming has had a range
of bespoke business advice schemes over the years which has to
a large extent kept farmers remote from Business Link. Many of
the problems which farmers face are relevant to any business—managing
change, improved marketing, adding value, risk planning and so
on. By directing farmers to existing sources of assistance, not
only do they have the opportunity to access a wider range of business
support mechanisms which can provide added value to them through
raised awareness of their role within the broader "business"
framework and business to business networks and knowledge transfer
networks but funds are also freed to provide assistance to the
wider rural economy too. A superficial analysis would consider
switching funds from Pillar I to Pillar II to be taking money
away from farmers—whereas, in fact, by engaging with mainstream
providers more effectively, farming and forestry industries have
the opportunity to be net beneficiaries
17. At present the use of funds under the
RDPE is very heavily focused on the farming sector. Apart from
some funding to the forestry sector all of Axis 1 funding is directed
to the farming (and food) sector and some elements of Axis 3 funding
are aimed at helping farmers to diversify. Any switch of funds
from Pillar I to Pillar II needs to recognize the reality of the
breadth of business interests now located on farms and the broader
links to wider rural development and the funds need to ensure
increased flexibility in recognition of this.
18. Although the question seeks views on
compulsory modulation there is the key issue of voluntary modulation
to be addressed. RDAs support the general principle of switching
funding from Pillar I to Pillar II. However where that is a result
of voluntary modulation there needs to be a clear recognition
that such an approach may risk putting the farming industry in
England at a competitive disadvantage compared with states or
regions where voluntary modulation is not used or is at a lower
rate.
Question 8 To what extent has the system of cross-compliance
contributed to an improved level of environmental protection?
How is it linking with other EU policy requirements such as the
Water Framework Directive?
19. The current system of cross compliance
is applied in a relatively onerous fashion. A balance needs to
be struck since businesses need to be economically viable in order
to respond to environmental challenges. Clear guidance on appropriate
cross-compliance requirements needs to be developed to reflect
this. There is generally a lack of connection between requirements
such as the Water Framework Directive and cross compliance.
Question 9 How can the CAP contribute to mitigation
of, and adaptation to, climate change? What do you consider the
role of biofuels to be in this regard?
20. Climate Change in the context of the
impact of the CAP is a relatively recent consideration. For example
in the Vision for the Common Agricultural Policy published jointly
by DEFRA and HM Treasury in December 2005 it is barely mentioned.
There is therefore a need for the industry to be helped to understand
precisely what impact it has on climate change and CAP instruments
should be designed to take into account those impacts. Climate
change has implications for farming systems. Farming may have
the potential to adapt to and mitigate against climate change
in a beneficial manner, and climate change also offers potential
business opportunities for the industry. RDAs question whether
the CAP can be a sufficiently sophisticated policy instrument
to comprehensively address climate changes issues.
Question 10 The Commissioner has expressed her
dissatisfaction at the financing agreement reached by the Member
States at the December 2005 Council. Do you consider the current
budget to be sufficient? Do you consider co-financing to be a
possible way forward in financing the Common Agricultural Policy?
21. It seems unlikely in the current political
climate that the budget would be increased significantly. It also
seems unrealistic to think that co-financing would be a way forward.
Question 12 How could the CAP be further simplified
and in what other ways would you like to see the Common Agricultural
Policy changed in the short and/or the long term?
22. The CAP has been simplified considerably
by the reforms of 2003 but could be simplified further by the
progressive phasing out of some instruments of support (as mentioned
in paragraph 6). A switch of funding to Pillar II would provide
a greater facility to place farming in its rightful context within
the rural economy. Finally a clear focus on payments under the
CAP being for public benefit which the market place cannot deliver
would help to secure the future for farmers.
June 2007
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